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Advisers Launch A Tech Revolution To Tap The Wider Market – Wealth Tech Digest #45

Key takeaways

✅ Advisers Launch A Tech Revolution To Tap The Wider Market

Our first digest today takes a look at how wealth managers create ‘hybrid’ services that combine low-cost digital advice with face-to-face options. This comes as wealth managers aim to attract a broader range of UK customers with inexpensive, online financial advice services. For example, Vanguard imported a version of its low-cost financial advice product to the UK in April along with British names such as Charles Stanley and M&G Wealth. The need for this service is highlighted in the fact that only 8% of UK adults take formal financial advice, according to the Financial Conduct Authority. Because of these needs, robo advisers have tried to bridge the gap with affordable online platforms to guide investing decisions. These services have grown to capture 19% share of customers in the direct-to-consumer investment market but only for 3% of assets. Some of these robo advisers have also dabbled with adding human contact to their processes, but many of these companies have struggled to become profitable. John Porteous of Charles Stanley says the firm’s new hybrid advice offering was catalyzed by the rapid growth of digital and direct-to-consumer markets. These hybrid approaches are also meant to benefit consumers with assets less than £100,000 or £250,000, which are the usual thresholds for traditional services. Though younger investors are the obvious targets with such a model, older customers nowadays are actually much more tech-savvy than we give them credit for. How do you feel about these new digital-centric approaches to wealth management?

✅ SIMON Raises $100 Million In Series B Funding

Our next digest takes a look at the latest funding round for SIMON to fuel its next growth phase. The platform, which was spun out from Goldman Sachs in December 2018, made the announcement regarding its series B and mentions that it was led by WestCap. WestCap is a growth equity firm founded by Laurence Tosi, a former CFO at Airbnb and Blackstone. The firm is known for investments backing market-leading tech-enabled, asset-light companies just like SIMON. The choice to back the platform comes as no surprise, SIMON’s cutting-edge technology streamlines the work of financial professionals. It enables them to explore alternative investment solutions and address historical impediments by using an intuitive easy-to-use platform. Jason Broder, CEO of Simon, says this latest funding will help the company further its mission. He adds that by combining with WestCap’s experience and expertise, SIMON has successfully embarked on the next phase of providing value for investors. Already, SIMON has seen remarkable growth, with more than 100,000 financial professionals having access to SIMON’s platform already. Kevin Marcus, a partner at WestCap, says that the firm is excited to partner with SIMON’s visionary leadership team as they innovate wealth management. Kevin has shown his dedication to this new acquisition by joining SIMON’s board of directors. Indeed, the future looks bright for the company, but only time will tell if this incredible growth will be sustainable.

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